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ANC Caucus response to the 2018 Medium Term Budget Policy Statement (MTBPS)

25 October 2018

The African National Congress (ANC) Parliamentary Caucus welcomes the 2018 Medium Term Budget Policy Statement (MTBPS) as delivered by the Minister of Finance, comrade Tito Mboweni in the National Assembly, on Wednesday, 24 October 2018.

We emerge from the 2018 MTBPS more assured of greater prospects of investment and focus on inclusive growth, investment in social infrastructure and in particular, investment in local government infrastructure.

Notwithstanding the complex economic context in which the MTBPS was delivered, the ANC Caucus is strengthened by critical indicators in the Minister's Speech that are designed to turn around persistent challenges that are preventing growth and development and commitments that have been made in other fora.

The MTBPS prioritises three interlinked policy areas:

  • Implementing the President's economic stimulus and recovery plan.
  • Improving governance and financial management at national, provincial and local government to support service delivery.
  • Reform in state owned companies.

The focus on the 5-point plan is an indication of efforts to stimulate growth and address the needs of our people. The growth enhancing economic reforms clearly bring in the private sector to partner with the public sector in creating a conducive environment that will allow for greater participation in targeted programmes across specific sectors of the economy.

The key focus of the 2018 MTBPS is on infrastructure spending and the setting up of the Infrastructure Fund. The reprioritisation of expenditure and channelling it into infrastructure is extremely important. The call of our people for investment where they live, is reflected in the MTBPS with focus on investment in township economies and the focus on local government infrastructure spend.

Critically, much of this infrastructure is spent in investment in Municipal Infrastructure Investment. The building of capacity at local government level to improve service delivery is a response to the current state of our municipalities as we have raised through our oversight work. We also welcome the financing of additional skills into the local government sphere focusing on and targeting key challenges that result in service delivery protests. This practical approach in dealing with local government and key frontline departments is a refreshing approach. It is one we have long being calling for as the ANC through our parliamentary oversight.

The proclamation for the need of making use of technical skills and capacity in other state institutions and applying these to sort out challenges in Water and Sanitation brings confidence as this matter has been raised by our ANC Parliamentary Caucus on numerous occasions.

The commitment to deliver on sanitation to all schools to address the horror of learners falling in pit latrine toilets at school is most welcome. This speaks to the heart of access to quality education. The agreements of the recent Jobs Summit also finds practical expression in the MTBPS in the form of an additional 2,000 jobs in the health sector.

We are particularly delighted by the announcement of the zero-rating of Sanitary Towels, Cake and Bread Flour as a direct response to the cry of our people of the cost of these essential goods. Most significantly, the historic decision to zero-rate sanitary towels is a step in the right direction towards ensuring the dignity of women, especially those from poor households, is restored. We further note, and welcome the roll-out of free sanitary towels to public schools in certain provinces. We trust this will soon become a national roll-out programme by the relevant departments.

The fact that the MTBPS commits to public resources of R5.9 trillion over the next three years is substantial spending. This focus of the MTBPS means that the ANC led government's commitment to the needs of our people is reflected in the fact that 56.2% of expenditure is allocated to education, health, provision of water and electricity and social grants.

Concerns are to be found in the fact that Gross Domestic Product (GDP) is revised downwards from 1.5% to 0.7%. What is more concerning is that we are falling behind since population growth stands at 2% and we are only growing at a projected 0. 7%. This can move the country from a technical into full recession. We are at the same time pleased to see that inflation has only shifted upwards by 0. 5% to 4. 95% year on year.

The announced high-level investment in key institutions which are critical to revenue collection like SARS, is building confidence in our people that the taxation system and their contribution is going towards meaningful expenditure. These are all part of improving the investment climate by strengthening governance in institutions and removing policy bottlenecks. This builds upon restoring good governance and financial stability at public institutions and state-owned enterprises.

As the Minister said in his speech, "we are at the crossroads, we can either choose to go left or to go right or to go straight on the path to nowhere. We are choosing the road of prosperity and opportunity, where the true spirit of South Africa lies. I urge South Africans to journey with us on this path. A path destined to take us out of poverty and deprivation."

This therefore means that all of us; public servants, business, civil society, labour and communities must work together to ensure that we deal with the triple crisis of poverty, unemployment and inequality.

Issued by the Office of the ANC Chief Whip, comrade Jackson Mthembu.


Nonceba Mhlauli

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